In August, this column examined the plight of some 40 employees at Penn Specialty Chemicals, a small company that went bankrupt in 2008. They were supposed to receive their 401(k) savings when the company collapsed. Instead, the bankruptcy trustee has withheld distributions, pending approval from the Internal Revenue Service.

While the employees have waited, administrative fees on their accounts have piled up. During 2009 and 2010, for example, $111,463 in fees was charged against the roughly $4 million that the accounts held.

The particulars of this case are unusual. What is not unusual is for 401(k)’s to be frozen when sponsors go bankrupt. Penn Specialty sold most of itself to a French chemicals concern in July 2008 and told its workers they could shift their plans to the acquirer or maintain them with Vanguard, which keeps the records for the Penn Specialty plan. Many, especially those nearing retirement, stuck with Vanguard.

Now they can’t touch their money.

Why return to this unpleasantness now? Hopeful news for Penn Specialty 401(k) holders — and others in this kind of mess — may be on the horizon. Last week, theLabor Department proposed a rule that it says will prevent cases like this from dragging on. The rule outlines three relatively straightforward conditions that a trustee must meet when terminating a plan. If the trustee performs these functions, the I.R.S. has essentially agreed not to challenge winding down the plan. Previously, trustees were subject to some liability if they did not receive I.R.S. approval.

“The major goal here is to make sure workers and retirees from bankrupt companies get their money sooner,” said Phyllis C. Borzi, assistant secretary of labor for the Employee Benefits Security Administration. “This will also protect participants against their accounts being eroded by unnecessary excessive fees.”

While the new rule is welcomed, it will be effective only if the Labor Department enforces it. Ms. Borzi said she hopes that the change will encourage trustees to do the right thing. But, she added, “we can come after you if you charge unreasonable fees and if you don’t do your job.”

George Morrison, a lawyer at the Continental Benefits Group, who specializes in employee retirement plan matters, says such fees are at the heart of the problem. “The concern really is what is being charged to participants,” he said. “As a service provider, you can charge what you want to the plan.” Those charges end once the plan is terminated.

Plan participants, meanwhile, suffer and in multiple ways.

David A. Lovejoy, a former employee of Penn Specialty, now works as a chemist at the company that acquired it. When he and his wife divorced four years ago, the court awarded her half of his 401(k). But with no access to the money, Mr. Lovejoy has not been able to comply with the court order. As a result, he has been required to pay alimony. For almost three years, these payments have totaled roughly a quarter of his income, he said.

Looking for help, Mr. Lovejoy tried calling the officials charged with overseeing the 401(k), including the plan sponsor, the Comprehensive Consulting Group of Melville, N.Y. He said his calls were not returned. Comprehensive Consulting did not return this reporter’s call.

“It’s smashed me,” Mr. Lovejoy said in an interview on Friday. “I’m almost 63 years old. I had to refinance the house and do a lot of things to manipulate around this.”

It is something of a mystery why the Penn Specialty case has dragged on this long. Termination of such a matter should be relatively uncomplicated because I.R.S. rules state that bankruptcy is often reason enough to support a plan’s termination. Participants in such situations should receive their share of a plan’s assets “as soon as administratively feasible,” the I.R.S. says, or within one year.

GEORGE L. MILLER, an accountant at Miller Coffey Tate in Philadelphia, is the trustee for the Penn Specialty case. In a phone interview on Friday, he said the I.R.S. last month had “disqualified” the Penn Specialty plan, making any distributions taxable and possibly generating penalties. He said he filed an appeal on Dec. 7.

The I.R.S. disqualified the plan for several reasons, Mr. Miller said. One reason, he explained, was that it disagreed with his view that some participants had been involuntarily terminated. This has a bearing on whether a plan can be qualified, Mr. Miller said.

I asked if he had told participants about the disqualification. He said he hadn’t. “I make certain decisions and try to get the problems fixed,” Mr. Miller said. “I don’t sit there and tell the entire world.”

Mr. Miller was appointed to oversee this matter by the United States Trustee, a unit of the Justice Department charged with policing the integrity of the nation’s bankruptcy system. I asked a spokeswoman if the trustee’s office is concerned about the Penn Specialty matter. She declined to comment.

At least the plan’s bookkeeper, Vanguard, has waived annual fees for Penn Specialty account holders. A spokesman for Vanguard said it had stopped paying the plan’s overseers in 2011 after it had questioned them about administrative fees and the delay in resolving the situation. It said it was not satisfied with their response.

Lance Eckel is another former Penn Specialty employee who is upset about not having access to his money.

“I wanted to get my funds out and put them in a place where I would control their destiny a little bit more,” he said. “I’ve tried to call the plan administrator but he never returned my four phone calls. The bankruptcy judge should take the plan away from him and give it to someone else.”

Mr. Miller confirmed that the Employee Benefits Security Administration is looking into the Penn Specialty matter. He also said that the costs of the investigation — including the time he spends answering subpoenas and in depositions, for example — would be billed to the plan participants.

Yet another burden for these beleaguered folks.

Maybe the Labor Department inquiry into the Penn Specialty case will reveal why this process has been so protracted. But it’s more than unfair to charge participants who’ve been waiting five years to get at their money the cost of investigating a mess that is not of their making.

Gretchen Morgenson is assistant business and financial editor and a columnist at the New York Times. She has covered the world financial markets for the Times since May 1998 and won the Pulitzer Prize in 2002 for her "trenchant and incisive" coverage of Wall Street.

Ms. Morgenson joined The Times as assistant business and financial editor in May 1998. Previously, she was assistant managing editor at Forbes magazine since rejoining the magazine in March 1996. Before that, she was the press secretary for the Forbes for President campaign from September 1995 to March 1996.

She is the author of "Forbes Great Minds Of Business," published by John Wiley & Co., in 1997 and co-author of "The Woman's Guide to the Stock Market," published by Harmony Books in 1981.

In August, this column examined the plight of some 40 employees at Penn Specialty Chemicals, a small company that went bankrupt in 2008. They were supposed to receive their 401(k) savings when the company collapsed. Instead, the bankruptcy trustee has withheld distributions, pending approval from the Internal Revenue Service.

While the employees have waited, administrative fees on their accounts have piled up. During 2009 and 2010, for example, $111,463 in fees was charged against the roughly $4 million that the accounts held.

The particulars of this case are unusual. What is not unusual is for 401(k)’s to be frozen when sponsors go bankrupt. Penn Specialty sold most of itself to a French chemicals concern in July 2008 and told its workers they could shift their plans to the acquirer or maintain them with Vanguard, which keeps the records for the Penn Specialty plan. Many, especially those nearing retirement, stuck with Vanguard.

Now they can’t touch their money.

Why return to this unpleasantness now? Hopeful news for Penn Specialty 401(k) holders — and others in this kind of mess — may be on the horizon. Last week, theLabor Department proposed a rule that it says will prevent cases like this from dragging on. The rule outlines three relatively straightforward conditions that a trustee must meet when terminating a plan. If the trustee performs these functions, the I.R.S. has essentially agreed not to challenge winding down the plan. Previously, trustees were subject to some liability if they did not receive I.R.S. approval.

“The major goal here is to make sure workers and retirees from bankrupt companies get their money sooner,” said Phyllis C. Borzi, assistant secretary of labor for the Employee Benefits Security Administration. “This will also protect participants against their accounts being eroded by unnecessary excessive fees.”

While the new rule is welcomed, it will be effective only if the Labor Department enforces it. Ms. Borzi said she hopes that the change will encourage trustees to do the right thing. But, she added, “we can come after you if you charge unreasonable fees and if you don’t do your job.”

George Morrison, a lawyer at the Continental Benefits Group, who specializes in employee retirement plan matters, says such fees are at the heart of the problem. “The concern really is what is being charged to participants,” he said. “As a service provider, you can charge what you want to the plan.” Those charges end once the plan is terminated.

Plan participants, meanwhile, suffer and in multiple ways.

David A. Lovejoy, a former employee of Penn Specialty, now works as a chemist at the company that acquired it. When he and his wife divorced four years ago, the court awarded her half of his 401(k). But with no access to the money, Mr. Lovejoy has not been able to comply with the court order. As a result, he has been required to pay alimony. For almost three years, these payments have totaled roughly a quarter of his income, he said.

Looking for help, Mr. Lovejoy tried calling the officials charged with overseeing the 401(k), including the plan sponsor, the Comprehensive Consulting Group of Melville, N.Y. He said his calls were not returned. Comprehensive Consulting did not return this reporter’s call.

“It’s smashed me,” Mr. Lovejoy said in an interview on Friday. “I’m almost 63 years old. I had to refinance the house and do a lot of things to manipulate around this.”

It is something of a mystery why the Penn Specialty case has dragged on this long. Termination of such a matter should be relatively uncomplicated because I.R.S. rules state that bankruptcy is often reason enough to support a plan’s termination. Participants in such situations should receive their share of a plan’s assets “as soon as administratively feasible,” the I.R.S. says, or within one year.

GEORGE L. MILLER, an accountant at Miller Coffey Tate in Philadelphia, is the trustee for the Penn Specialty case. In a phone interview on Friday, he said the I.R.S. last month had “disqualified” the Penn Specialty plan, making any distributions taxable and possibly generating penalties. He said he filed an appeal on Dec. 7.

The I.R.S. disqualified the plan for several reasons, Mr. Miller said. One reason, he explained, was that it disagreed with his view that some participants had been involuntarily terminated. This has a bearing on whether a plan can be qualified, Mr. Miller said.

I asked if he had told participants about the disqualification. He said he hadn’t. “I make certain decisions and try to get the problems fixed,” Mr. Miller said. “I don’t sit there and tell the entire world.”

Mr. Miller was appointed to oversee this matter by the United States Trustee, a unit of the Justice Department charged with policing the integrity of the nation’s bankruptcy system. I asked a spokeswoman if the trustee’s office is concerned about the Penn Specialty matter. She declined to comment.

At least the plan’s bookkeeper, Vanguard, has waived annual fees for Penn Specialty account holders. A spokesman for Vanguard said it had stopped paying the plan’s overseers in 2011 after it had questioned them about administrative fees and the delay in resolving the situation. It said it was not satisfied with their response.

Lance Eckel is another former Penn Specialty employee who is upset about not having access to his money.

“I wanted to get my funds out and put them in a place where I would control their destiny a little bit more,” he said. “I’ve tried to call the plan administrator but he never returned my four phone calls. The bankruptcy judge should take the plan away from him and give it to someone else.”

Mr. Miller confirmed that the Employee Benefits Security Administration is looking into the Penn Specialty matter. He also said that the costs of the investigation — including the time he spends answering subpoenas and in depositions, for example — would be billed to the plan participants.

Yet another burden for these beleaguered folks.

Maybe the Labor Department inquiry into the Penn Specialty case will reveal why this process has been so protracted. But it’s more than unfair to charge participants who’ve been waiting five years to get at their money the cost of investigating a mess that is not of their making.

Gretchen Morgenson is assistant business and financial editor and a columnist at the New York Times. She has covered the world financial markets for the Times since May 1998 and won the Pulitzer Prize in 2002 for her "trenchant and incisive" coverage of Wall Street.

Ms. Morgenson joined The Times as assistant business and financial editor in May 1998. Previously, she was assistant managing editor at Forbes magazine since rejoining the magazine in March 1996. Before that, she was the press secretary for the Forbes for President campaign from September 1995 to March 1996.

She is the author of "Forbes Great Minds Of Business," published by John Wiley & Co., in 1997 and co-author of "The Woman's Guide to the Stock Market," published by Harmony Books in 1981.